There was a fascinating article about how visual art from contemporary artists gets valued. Essentially, you have a patronage system whereby galleries keep stables of artists and build brands out of their output. The galleries try their hardest to ensure that values climb steadily upward, and the rest of the industry tries their best to not rock the boat.
Auction houses throw a wrench into the works by allowing the market as a whole to weigh in. If an artwork gets sold at auction for significantly more or less than where it "should" be selling at, the whole system suffers. So the galleries representing the artists will bid on the artworks themselves and auctioneers will pretend that the piece was sold, to someone in the back, if it doesn't meet the reserve.
The takeaway I got from it was that value of art is not and can never be intrinsic, somebody is acting as a taste-maker, but that somebody never has complete control over the market.
If you think about it, it's not a whole lot different from other kinds of tradable good, (currency comes to mind) it's just that there are far fewer external indicators of value, making it more difficult to operate rationally. There's stability within the system, but the system is artificial and can seem rather arbitrary.